3 Emerging Tech Stocks You Must Buy with Strong Value Proposition

The tech industry seems to flourish in the future owing to the increasing appetite for sophisticated offerings in fields like cloud content management systems, enterprise analytics, and customer care services. As the trends pursue for digitalization, it fuels even more demands in the sales within tech market for the specific tech hardware and superior analytic tools.

It is against this backdrop that prudent investors may consider investing in the often overlooked but undervalued tech stocks such as Box, Inc. (BOX), Teradata Corporation (TDC), and AstroNova, Inc. (ALOT) that have promising fundamentals.

Growth of the tech industry comes from developments of AI, IoT, and cloud computing. Such improvements help promote productivity and progress for instance in hybrid work that requires better collaboration, data handling and reporting services. As IT services expenditure is forecasted to growth by 7.1% this year to $ 1.61 Trillion, it makes the sector a worthy one to invest in.

In the same way, high quality hardware such as digital print equipment, labeling and data acquisition systems also face the increase in demand because of rising workload within sectors, greater complexity in processing and business integration with customers. It is mainly because of this requirement for strong electronics to maintain the efficient performance that the IT hardware sector is projected to record a CAGR of 7.9% reaching $191.0.

Keeping in view such optimistic trends, we also analyze the fundamentals of the three tech picks mentioned above.

Box, Inc. (BOX)

BOX offers cloud-based content management solutions which allow companies of all sizes to store and share their content on virtually any device. It targets financial services, health care, government and legal service industries across the world.

On August 8, 2024, BOX made headlines when it said that it took over Alphamoon’s AI-based document processing technology which is new for its Intelligent Content Management platform. This improves BOX’s capabilities to automate a number of document process and turn metadata from advanced OCR and language models.

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On August 6, 2024, BOX publicized the information that its AI system for the Enterprise Plus customers allows unlimited asking of the queries. The business has been adopted throughout major Japanese corporations such as Asahi Group, The Norinchukin Bank and Hitachi High-Tech in order to employ generative AI to improve the management and use of unstructured data.

Under the aggregated forward non-GAAP P/E, BOX’s 19.69x is 15.8% lower than the industry average norm of 23.39x. Its 17.33x forward EV/EBIT is 10.3% lower than the 19.31x industry average.

Revenues for BOX for the second quarter operational January through July 31st, 2024 have increased year-on year compared to $ 262.72 million to $ 270.04 million which is an increase of 3.3 percent. Grossed UP net income from sales of $ 201.93 totaled $ 220.24 million which in comparison with the prior year is up 9.5 percentage points. Non-GAAP operating income has grown by 18.5% compared to the previous period reaching $ 76.69 million.

Also, its non-GAAP net income attributable to equity holders rose by 13.3% against the prior year to $72.78 million. The non-GAAP attributable net income per share increased 14.9% as compared to the same quarter of the previous year to $0.36.

For the quarter ending October 31, 2024, Street sees BOX’s EPS and revenue growths ramping to 17.4% and 5.2% year-over-year improvement to $0.42 and $275.10 million respectively. Of the consensus estimates for EPS reported over the past four sequential quarters, BOX outperformed three of those estimates. Of the last 9 months the share price has appreciated by 34.1% to settle at $ 32.89 as at the end of last trading session.

Further, the POWR Ratings of box reflect strong current and future potential. Its overall rating is A indicative of Strong Buy in our rating system. POWR Ratings appraisals are made on stocks using 118 various factors and their respective weightings.

Its rank is 4th among 75 stocks in the Technology – Services sector. It has an A rating for Growth and Quality and a B rating for Value and Social. Follow this link to check on Momentum, Stability, and Sentiment ratings of Box.

Teradata Corporation (TDC)

TDC provides enterprises with an integrated multi-cloud data platform for enterprise analytics. Teradata Vantage is a data platform that gives companies the capacity to extract the value from their data across an enterprise. It further links sources of data to drive ecosystem simplification while offering integration, supporting customers on their journey to the cloud through an integrated migration.

On August 12, 2024, TDC announced as the official cloud analytics provider for the Los Angeles Clippers and their new arena, Intuit Dome. TDC delivers cloud analytics and AI technologies to enhance the fan experience and is a Founding Partner of Intuit Dome.

TDC has just recently announced its intention to be integrated with DataRobot, where the DataRobot AI Platform is now integrated into TDC’s VantageCloud and ClearScape Analytics. Such integration is aimed at tapping into the strength in AI capabilities offered to enterprises, making AI models more adaptable and flexible to deploy in an enterprise environment. Such an announcement was made on July 16, 2024.

In forward EV/EBIT, TDC ranks at 8.69, which is 55% below the industry average of 19.31x. Its forward non-GAAP P/E of 12.40x is also 47% below the industry average of 23.39x. Lastly, its 1.49x forward non-GAAP PEG stands at 17.6% below the industry average at 1.81x.

Total revenues for TDC for the second quarter ended June 30, 2024 were $436 million. Non-GAAP operating income realized was 33.3% more than in the year-prior period at $96 million. The company has realized an increase in non-GAAP net income and non-GAAP EPS of 26.5% and 33.3%, correspondingly, versus the year-prior values of $62 million and $0.64.

TDC is expected to have the earnings-per-share estimate for the quarter ending September 30, 2024 increase by 33.7% from the same period last year to $0.56. The stock has beaten the consensus EPS estimates for every trailing four quarters. During the last month, the stock has advanced 7.6%. In its last trading session, the stock closed at $27.78.

TDC’s solid fundamentals also shine through in POWR Ratings. It has an overall rating of A, which is equivalent to a Strong Buy in our proprietary rating system. It has an A grade for Value and Quality and a B for Growth and Sentiment. Within the Technology-Services industry, it is ranked #3. To access the additional POWR Ratings of TDC for Momentum and Stability.

AstroNova, Inc. (ALOT)

ALOT designs, develops, manufactures, and distributes specialty printers and data acquisition and analysis systems in the United States, Europe, Asia, Canada, Central and South America, and internationally. The company operates through two business segments: Product Identification (PI) and Test & Measurement (T&M).

ALOETM and its newly acquired subsidiary MTEX NS premiered breakthrough printing technologies on June 5, 2024, at Drupa 2024. Solutions in newly introduced product lines herald improvements in label and packaging printing for flexible packaging and indicate their strengthened market position in digital printing.

As for the trailing-12-month EV/Sales, ALOT’s 0.85x works out to being 71.7% below the industry average at 3.01x. Its 11.02x is 56% below the industry average of 25.08x for the trailing-12-month EV/EBIT. As for the trailing-12-month EV/EBIT, its 8.07x works out to being 54.5% below the industry average of 17.74x.

ALLOT posted $32.96 million in total revenue for the first quarter ended April 27, 2024. Its non-GAAP gross profit totaled $11.97 million. The company’s non-GAAP net income was $1.18 million, or $0.15 per common share, 39.3% and 36.4% higher year-over-year, respectively.

ALOT’s stock surged 15.7% over the last one year to close the last trading session at $14.85.

POWR Ratings assigns an overall grade of B, which translates to a Buy in our in-house rating system. ALO is currently ranked #9 out of 40 stocks in the Technology-Hardware industry. It also has an A for Value, B for Sentiment. Click here to see ALOT’s Growth, Momentum, Stability, and Quality.

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BOX shares closed Friday at $33.18 per share, up $0.29 (+0.88%). Year-to-date, BOX has risen 29.56%, compared with a 18.97% one-year gain in the benchmark S&P 500 index.